Research slam: (In-)Equality and prosperity

Oct
21
04:30 PM - 05:30 PM

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Research slam

What is the role of education and skills in rising inequality? How crucial are childhood and family environments, including schooling? What is the role of economic institutions? Also, how important are global issues in inequality, such as outsourcing, immigration, and trade? In the past four decades, the incomes of many of the world’s poorest citizens have increased and extreme poverty has fallen faster than ever before in human history. However, while we are now living in a period of falling global inequality, overall inequality is still high and new forms of inequality in income, health, and life prospects have emerged. What are the reasons for this and how can we improve the situation to ultimately build a more prosperous and just world?

The 35 minutes session is packed with insights from ongoing research on different aspects of inequality. The first talk provides a political perspective, showing how confidence about one’s own future opportunities influences voting behavior. Three presenters focus on innovation, labor, and taxation, discussing the interplay between rising automation, job losses and corresponding policy measures. Another group presents findings from the field of development and behavioral economics, showing that early interventions in children’s life as well as learning to be more patient can make a huge difference in education outcomes and wealth accumulation.

What is the role of education and skills in rising inequality? How crucial are childhood and family environments, including schooling? What is the role of economic institutions? Also, how important are global issues in inequality, such as outsourcing, immigration, and trade? In the past four decades, the incomes of many of the world’s poorest citizens have increased and extreme poverty has fallen faster than ever before in human history. However, while we are now living in a period of falling global inequality, overall inequality is still high and new forms of inequality in income, health, and life prospects have emerged. What are the reasons for this and how can we improve the situation to ultimately build a more prosperous and just world?

The 35 minutes session is packed with insights from ongoing research on different aspects of inequality. The first talk provides a political perspective, showing how confidence about one’s own future opportunities influences voting behavior. Three presenters focus on innovation, labor, and taxation, discussing the interplay between rising automation, job losses and corresponding policy measures. Another group presents findings from the field of development and behavioral economics, showing that early interventions in children’s life as well as learning to be more patient can make a huge difference in education outcomes and wealth accumulation.

Presentations

1. Inequality, labor market opportunities and electoral preferences by Silja Häusermann

"Rising income and labor market inequality has been associated with increasing vote shares for radical political parties in many studies. However, voters' perceptions of their risks and opportunities are better predictors of political preferences than actual grievances. The presentation will show that people's evaluation of their future labor market opportunities is an important driver of vote choice: confident, aspirational voters prefer mainstream parties, even if they have low incomes, while apprehensive voters prefer radical parties, even if they have high incomes."

2. Inequality and wealth Taxation by Florian Scheuer

"The rising concentration of top wealth has revived the idea to tax wealth directly, on top of the income that generates wealth. This presentation will discuss research on the effects of such wealth taxes on inequality, fiscal revenues and economic growth. We will also review the experience of countries that currently have or have had wealth taxes in the past."

3. Patience, parental wealth & wealth inequality by Ernst Fehr

"Wealth inequalities have important macro-economic implications. They amplify the propagation of shocks, influence the social cost of economic fluctuations, and affect the impact of government interventions. My presentation documents two important sources of wealth inequality - inequalities in education and individual differences in time discounting (patience)."

4. Worth your weight: On the benefits of obesity in low-income countries by Elisa Macchi

"A large share of the poors’ budget is spent on status goods. In my presentation I investigate if there can be economic benefits from status goods consumption in such low-resource settings. I look the case of obese borrowers in Kampala, Uganda. Obesity signals wealth. Accordingly, obese individuals have easier access to credit because loan officers screen borrowers by their body mass, and such obesity premium is larger when lenders have little information about the borrowers."

5. Automation and wages: A two-way street by David Hémous

"Automation has deeply transformed labor markets in the last four decades and is likely to shape our economies further. But it does not happen in a vacuum: it responds to profit incentives and increases notably with labor costs. My presentation documents this relationship and shows how it can explain salient features of the evolution of the income distribution in advanced economies."

6. Increasing educational opportunity in primary school by Ulf Zölitz

"Inequality of opportunity strikes when children with the same ability are tracked into different school because of their parents socio-economic status. In my presentation I show how an early intervention targeting socio-emotional skills can increase educational opportunity. The intervention increases the share of disadvantaged children entering the academic high school track in Switzerland. Intervention effects remain visible 12 years after the intervention was completed."

7. To UBI or not to UBI: That is the Question by Nir Jaimovich

"Discussions surrounding universal basic income (UBI hereafter) have become prevalent in recent years within policy circles and across various popular media outlets. The interest in this policy stems from structural changes in the labor market, where specific types of workers seem to have permanently lost their employment opportunities in the face of advances in automation and globalization. Introduction of a such a massive redistributive program entails significant changes in distortionary taxation. Yet, despite the recent emergence of the UBI as a possible policy tool, there is no formal quantitive evaluation of the effects its introduction will have on the economy. In this talk we fill this alarming gap; we quantify the impact that different UBI programs wiill have on the aggregate allocations in the economy, as well as their distributional consequences."

1. Inequality, labor market opportunities and electoral preferences by Silja Häusermann

"Rising income and labor market inequality has been associated with increasing vote shares for radical political parties in many studies. However, voters' perceptions of their risks and opportunities are better predictors of political preferences than actual grievances. The presentation will show that people's evaluation of their future labor market opportunities is an important driver of vote choice: confident, aspirational voters prefer mainstream parties, even if they have low incomes, while apprehensive voters prefer radical parties, even if they have high incomes."

Forum for Economic Dialogue

Special times call for special measures. That is why our annual forum this year took place online. Despite the change in format, we had sought to maintain our customary standards. We had a series of events in store, focusing on different aspects of inequality – a topic that has become even more important in light of the global pandemic and its devastating consequences, which has hit many of the most vulnerable people in the world particularly hard. Visit our event hub for timely updates and background information.

Special times call for special measures. That is why our annual forum this year took place online. Despite the change in format, we had sought to maintain our customary standards. We had a series of events in store, focusing on different aspects of inequality – a topic that has become even more important in light of the global pandemic and its devastating consequences, which has hit many of the most vulnerable people in the world particularly hard. Visit our event hub for timely updates and background information.

2020_forum2

Program overview

Research slam: (In-)Equality and prosperity Wednesday, 21.10.2020 | 16:30–17:30 (CET)
Moderator: Nir Jaimovich
Speakers: participants as listed
Panel session: Inequality - facts and consequences Wednesday, 28.10.2020 | 16:00–17:15 (CET)
Moderator: James Mackintosh
Speakers: Janet Currie, David Dorn, Branko Milanovic
Webinar: Taxing the superrich Tuesday, 3.11.2020 | 16:00–17:00 (CET)
Speaker: Florian Scheuer
Keynote lecture: Inequality and the future of capitalism Wednesday, 11.11.2020 | 18:00–19:00 (CET)
Speaker: Nobel Laureate Sir Angus Deaton
Research slam: (In-)Equality and prosperity Wednesday, 21.10.2020 | 16:30–17:30 (CET)
Moderator: Nir Jaimovich
Speakers: participants as listed
Panel session: Inequality - facts and consequences Wednesday, 28.10.2020 | 16:00–17:15 (CET)
Moderator: James Mackintosh
Speakers: Janet Currie, David Dorn, Branko Milanovic
Webinar: Taxing the superrich Tuesday, 3.11.2020 | 16:00–17:00 (CET)
Speaker: Florian Scheuer
Keynote lecture: Inequality and the future of capitalism Wednesday, 11.11.2020 | 18:00–19:00 (CET)
Speaker: Nobel Laureate Sir Angus Deaton

Speakers

Professor at the Department of Political Science, University of Zurich
Prof. Silja Häusermann

Silja Häusermann is a Professor of Political Science at the University of Zurich in Switzerland, where she teaches classes on Swiss politics, comparative political economy, comparative politics and welfare state research. Her research interests are in comparative politics and comparative political economy.

UBS Foundation Professor of Economics of Institutions, Research Fellow CEPR

Florian Scheuer received his PhD from MIT in 2010. He is interested in the policy implications of rising inequality, with a focus on tax policy. In particular, he has worked on incorporating important features of real-world labor markets into the design of optimal income and wealth taxes. These include economies with rent-seeking, superstar effects or an important entrepreneurial sector, frictional financial markets, as well as political constraints on tax policy and the resulting inequality. His work has been published in the American Economic Review, the Journal of Political Economy, the Quarterly Journal of Economics and the Review of Economic Studies, among other journals. In 2017, he received an ERC starting grant for his research on “Inequality - Public Policy and Political Economy.” Before joining Zurich, he was on the faculty at Stanford, held visiting positions at Harvard and UC Berkeley and was a National Fellow at the Hoover Institution. He is Co-Editor of Theoretical Economics and Member of the Board of Editors of the Review of Economic Studies. He is also a Co-Director of the working group on Macro Public Finance at the NBER. He has commented on tax policy in various US and Swiss media outlets.

Professor of Economics, Affiliated Professor at the UBS Center

Ernst Fehr received his doctorate from the University of Vienna in 1986. His work has shown how social motives shape the cooperation, negotiations and coordination among actors and how this affects the functioning of incentives, markets and organisations. His work identifies important conditions under which cooperation flourishes and breaks down. The work on the psychological foundations of incentives informs us about the merits and the limits of financial incentives for the compensation of employees. In other work he has shown the importance of corporate culture for the performance of firms. In more recent work he shows how social motives affect how people vote on issues related to the redistribution of incomes and how differences in people’s intrinsic patience is related to wealth inequality. His work has found large resonance inside and outside academia with more than 100’000 Google Scholar citations and his work has been mentioned many times in international and national newspapers.

Graduate Student in Economics at the University of Zurich
Elisa Macchi

Elisa Macchi is a 5th year PhD student in Economics at the University of Zurich. Her advisors are David Yanagizawa-Drott and Lorenzo Casaburi. Macchi's research falls at the interesection of Development, Health and Experimental Economics. She is interested in how social enviroments affect economic and health outcomes, with a focus on developing countries.

UBS Foundation Associate Professor of Economics of Innovation and Entrepreneurship

David Hémous received his PhD from Harvard University in 2012. He is a macroeconomist working on Economic Growth and Innovation. His work highlights that innovation responds to economic incentives and that public policies should be designed taking this dependence into account. In particular, he has showed in the context of climate change policy that innovations in the car industry responds to gas prices and that global and regional climate policies should support clean innovation to efficiently reduce CO2 emissions. His work on technological change and income distribution shows that higher labor costs lead to more automation, and that the recent increase in labor income inequality and in the capital share can be explained by a secular increase in automation. He has also showed that innovation affects top income shares. His work has been highlighted in several newspapers and magazines including Le Monde, The Economist, The Washington Post or Forbes, and it has been presented in policy circles such as COP 15 conference in Copenhagen or the French parliamentary meetings.

Assistant Professor of Economics of Child and Youth Development endowed by the Jacobs Center for Productive Youth Development
Prof. Ulf Zölitz

Ulf Zölitz primary research interests are in the field of applied microeconomics. He is interested in labor economics, economics of education and behavioral economics. His current research focuses on peer effects, the role of personality in education and interventions aiming to enhance the development of cognitive skills in children.

Professor of Economics, Affiliated Professor at the UBS Center

Nir Jaimovich is a macroeconomist who studies business cycles and the dynamics of the labor market. He is a research fellow at the Centre for Economic Policy Research (CEPR) and an associate editor of the Journal of Monetary Economics and the Journal of Economic Theory. Before joining the University of Zürich, Professor Jaimovich was on the faculty at the Marshall School of Business at USC, Duke University, Stanford University, and the University of California, San Diego. He was also a Research Associate in the National Bureau of Economic Research (NBER) Economic Fluctuations and Growth program.

Professor at the Department of Political Science, University of Zurich
Prof. Silja Häusermann

Silja Häusermann is a Professor of Political Science at the University of Zurich in Switzerland, where she teaches classes on Swiss politics, comparative political economy, comparative politics and welfare state research. Her research interests are in comparative politics and comparative political economy.

UBS Foundation Professor of Economics of Institutions, Research Fellow CEPR

Florian Scheuer received his PhD from MIT in 2010. He is interested in the policy implications of rising inequality, with a focus on tax policy. In particular, he has worked on incorporating important features of real-world labor markets into the design of optimal income and wealth taxes. These include economies with rent-seeking, superstar effects or an important entrepreneurial sector, frictional financial markets, as well as political constraints on tax policy and the resulting inequality. His work has been published in the American Economic Review, the Journal of Political Economy, the Quarterly Journal of Economics and the Review of Economic Studies, among other journals. In 2017, he received an ERC starting grant for his research on “Inequality - Public Policy and Political Economy.” Before joining Zurich, he was on the faculty at Stanford, held visiting positions at Harvard and UC Berkeley and was a National Fellow at the Hoover Institution. He is Co-Editor of Theoretical Economics and Member of the Board of Editors of the Review of Economic Studies. He is also a Co-Director of the working group on Macro Public Finance at the NBER. He has commented on tax policy in various US and Swiss media outlets.

Professor of Economics, Affiliated Professor at the UBS Center

Ernst Fehr received his doctorate from the University of Vienna in 1986. His work has shown how social motives shape the cooperation, negotiations and coordination among actors and how this affects the functioning of incentives, markets and organisations. His work identifies important conditions under which cooperation flourishes and breaks down. The work on the psychological foundations of incentives informs us about the merits and the limits of financial incentives for the compensation of employees. In other work he has shown the importance of corporate culture for the performance of firms. In more recent work he shows how social motives affect how people vote on issues related to the redistribution of incomes and how differences in people’s intrinsic patience is related to wealth inequality. His work has found large resonance inside and outside academia with more than 100’000 Google Scholar citations and his work has been mentioned many times in international and national newspapers.

Graduate Student in Economics at the University of Zurich
Elisa Macchi

Elisa Macchi is a 5th year PhD student in Economics at the University of Zurich. Her advisors are David Yanagizawa-Drott and Lorenzo Casaburi. Macchi's research falls at the interesection of Development, Health and Experimental Economics. She is interested in how social enviroments affect economic and health outcomes, with a focus on developing countries.